Arthur Hayes, co-founder of the crypto derivatives exchange BitMEX, has expressed serious concerns regarding the future of most Layer 1 blockchain tokens, particularly those outside of Ethereum and Solana. In a recent interview with Altcoin Daily, he pointed out that many of these newly launched networks, while initially capturing investor interest, lack the sustainable fundamentals necessary for long-term viability and are often overvalued.
Hayes specifically mentioned Monad, a new Layer 1 project backed by Coinbase Ventures. He noted that at the time of his comments, the price of the MON token had increased by 45% since its initial coin offering (ICO), reaching approximately $0.037, with a market capitalization close to $398 million. Despite this surge, Hayes anticipates a significant downturn, citing the token”s inflated fully diluted valuation and its low circulating supply.
According to Hayes, the trend for many new Layer 1 projects is an initial price spike followed by sharp corrections. This pattern often results from investor excitement rather than solid fundamental value. He noted that new L1s frequently attract attention as investors seek out the next Ethereum. However, this early enthusiasm typically wanes, leaving most tokens unable to sustain their momentum once the initial hype dissipates. Although venture capital backing can provide temporary price support, Hayes cautioned that it does not ensure enduring success.
In contrast to the challenges faced by newer Layer 1 tokens, Hayes identified Ethereum and Solana as notable exceptions. He regards Ethereum as a critical foundation for institutional adoption of blockchain technology. Major banks and organizations are increasingly opting for public networks rather than private chains, valuing their security and utility. Layer 2 solutions like Arbitrum and Optimism are expected to enhance Ethereum”s scalability while preserving privacy, setting the stage for continued growth.
While Hayes acknowledged that Solana has previously benefited from the activity surrounding meme coins, he also noted that this growth has slowed. For Solana to maintain user engagement and price momentum, it will require new catalysts. Although Hayes doubts it will surpass Ethereum, he believes Solana will remain a significant player in the blockchain ecosystem.
In addition to Ethereum and Solana, Hayes highlighted his top picks in the cryptocurrency space, which include Bitcoin, Zcash, and Ethena. He considers these networks to combine high adoption rates, robust security, and practical utility, all of which are essential for long-term success. In stark contrast, Hayes warns that most other Layer 1 tokens face a considerable risk of decline as initial enthusiasm fades.
